Posted May 15, 2012 by Team AnalyticpediA in Analytics

Predict Stock Market Via Twitter: Sentiment Analysis

Twitter Sentimen Analysis Analyticpedia
Twitter Sentimen Analysis Analyticpedia

Researchers at a US university found they were able to predict the rise and fall of the Dow Jones Industrial Average with near 90 percent accuracy several days in advance by analyzing messages on Twitter. The researchers at Indiana University-Bloomington’s School of Informatics and Computing analyzed more than 9.8 million “tweets” from 2.7 million users of the micro-blogging service during 10 months in 2008.

They measured the “collective public mood” through tweets and then compared it to closing stock market values and found a correlation between the value of the Dow and public sentiment, Indiana University said in a press release. Here is a great and advanced application of Sentiment Analysis.

Previous studies have found a link between Twitter traffic and a movie’s success or failure at the box office but the Indiana University study is believed to be the first to study Twitter and Wall Street. Indiana University said the researchers used two mood-tracking tools — OpinionFinder and Google’s Profile of Mood States (GPOMS) — to analyze the text content of the Twitter messages. OpinionFinder classified tweets as positive or negative measurements of public mood. GPOMS categorized the mood of tweets as calm, alert, sure, vital, kind, and happy. The researchers then compared the public mood measurements with Dow Jones closing values.

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